The former CFO of Iqbal Survé-linked Ayo Technology Solutions has told the inquiry into the Public Investment Corporation (PIC) how she was asked to "adjust" margins to increase the company’s profit.

Naahied Gamieldien, who served as CFO until her resignation in January 2019, is still employed at the company as the executive head for business transformation. She appeared under subpoena at the inquiry on Wednesday.

According to Gamieldien, the CEO of Ayo parent African Equity Empowerment Investments (AEEI), Khalid Abdulla, who was also a board member of Ayo at the time, called her to a meeting at his home to discuss the technology company’s interim results for the period to end-February 2018.

"I presented to him an Excel version of the results as prepared by the Ayo finance team. At this point, Ayo’s profit after tax was R32m," said Gamieldien.

She said Abdulla questioned why the number was so low "as he was expecting a higher profitability and asked me to adjust the spreadsheet to reflect the usual margins to show him what the effect on PAT [profit after tax] would then be".

Gamieldien complied, and this resulted in profit after tax rising to R50m.

Due to the deteriorating health of her father at the time, Gamieldien went to Port Elizabeth to be with him, and provided the spreadsheet to Abdulla and Malick Salie, another AEEI executive, to complete.

According to an Ayo announcement on May 15 2018 the company reported profit after tax of R65.9m, which is more than double the number Gamieldien had provided to Abdulla in the spreadsheet.

An allegation of accounting manipulation was previously put forth by Ayo’s previous CEO, Kevin Hardy, in his testimony before the commission.

In response, the JSE has asked Ayo’s auditor, BDO, to review the numbers provided to the market.

The PIC, which manages more than R2-trillion in assets on behalf of the Government Employees Pension Fund and other social security funds, has been embroiled in numerous controversies, which include allegations of corruption against a number of its directors, prompting the entire board to resign in February.

In December 2017, the PIC controversially invested R4.3bn in Ayo for a 29% stake, allegedly at an inflated valuation.

Ayo’s former CIO Siphiwe Nodwele testified at the inquiry that the company had exaggerated its value at the time it was seeking an investment from the PIC and had given the market misleading information on its revenue prospects. Hardy and Nodwele quit in August 2018, saying the company’s leadership had failed to address their governance concerns.

PIC investment

Last week, Ayo denied the claims by its former executives but said it would comply with the JSE’s directive. The PIC, meanwhile, has vowed to recover its investment.

Ayo’s share price last traded at R14.50, representing a 66% decline since its listing

Shares in AEEI, Sekunjalo’s public trading company, have lost about a fifth of their value since the company said on Friday that it would delay the release of its interim results. The company’s share price was at R2.30 on Wednesday, the worst level since July 2015, and a 20.14% decline in the week to date.

The investment company said on Friday that it had delayed the release of its interim results "due to unexpected developments within the AEEI group".

On Monday, it said it "needed to consider" the announcement by Ayo, in which it holds a 49.4% stake, on the JSE’s request.

"The board has taken cognisance of the announcement and would like to advise shareholders that AEEI will be releasing its interim results during the course of the week ending April 26 2019," AEEI said. It remains to be seen what valuation AEEI will place on its Ayo stake.